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Basic Question 10 of 15
Which of the following statements regarding commercial papers is false?
B. Commercial papers are very thinly traded in the secondary market.
C. Commercial papers with maturities less than 270 days are exempt from SEC registration.
D. Commercial papers are typically zero-coupon instruments.
A. Commercial papers are secured promissory notes.
B. Commercial papers are very thinly traded in the secondary market.
C. Commercial papers with maturities less than 270 days are exempt from SEC registration.
D. Commercial papers are typically zero-coupon instruments.
User Contributed Comments 4
| User | Comment |
|---|---|
| mtcfa | They are notes but they are not secured. They are backed by unused credit lines, but this is not really a form of collateral. |
| jpducros | What's the difference mtcfa ? |
| Jurrens | unused credit lines mean they just have access to the cash, they don't actually have it |
| khalifa92 | unused credit line is liquidity to meet short term debt from banks if they need |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
compare short-term funding alternatives available to corporations and financial institutions
CFA® 2024 Level I Curriculum, Volume 4, Module 4.